Tim Hortons president vows to improve relationship with franchisees after unrest

“The last three months have been very difficult for the brand…We definitely don’t like to be in the media with controversies and business issues with our restaurant owners…So much as has been said, and it is difficult to break from the clutter, but we have decided to communicate better.”

Macedo’s message signals a shift in the company’s approach to addressing the Great White North Franchisee Association, which says it represents at least half of the brand’s Canadian owners and whose vocal opposition to the company’s strategy has been a thorn in its side since the group formed last year.

The previous approach of Tim Hortons and parent company Restaurant Brands International had largely been to ignore the disgruntled franchisees.

“We do have a dissident group of franchisees that have been very vocal and exposed some of the business issues that any franchisee or any franchisee relationship has to a wider public and I don’t think that is good for anyone,” Macedo admitted on a call from Calgary, where he had just wrapped a meeting with franchisees.

He said he has spoken to members represented by GWNFA in his visits to Toronto, Montreal and Halifax and will encounter even more of them in Vancouver this week. The meetings are usually arranged at large hotels and include an evening reception and four-hour discussion that Macedo says is drawing attendance rates around 100 per cent.

The GWNFA has backed class-action lawsuits filed by franchisees over the company’s alleged improper use of a $700 million national advertising fund. It wrote to Navdeep Bains, the federal innovation minister earlier this year, alleging that RBI failed to live up to promises made under the Investment Canada Act in 2014. The group did not immediately respond to request for comment Thursday.

Negative attention on the company culminated in calls for a boycott earlier this year after it was reported that some franchisees in Ontario moved to offset the province’s minimum wage hike by cutting breaks and forcing employees to cover a bigger share of their benefits.

Tim Hortons has since fallen from 4th to 50th spot in national brand reputation rankings conducted by research company Leger.

The cross-country meetings are focused on Tims’ launch of its new “Winning Together” brand plan in April.

It is aimed at improving the customer experience and sales at Tim Hortons operations through its app, a new marketing campaign and a $700 million initiative to renovate restaurants to bring a more natural look and open-concept seating to Tim Hortons locations.

Macedo said the plan will also include product launches before the end of summer, some new packaging and a revamped “visual identity” for the brand.

He is seeking feedback from the franchisees about the forthcoming moves, but has also hired prominent pollster Allan Gregg to circulate a survey of owners to ensure franchisee voices are heard.

His moves towards smoothing things over with franchisees come as some of Tim Hortons’ biggest competitors capitalize on the company’s struggles. On Thursday, McDonald’s announced it is rolling out one of the brand’s most popular offerings: bagels.

Macedo acknowledged “we have some very good competitors,” but said he thinks “our brand is the strongest” and the quality of its breakfast products are “the best in Canada.”

“The competition is there, but once we get rolling in our direction, I think they have to be very concerned as well, now that we are starting to get a plan and getting everyone fired up behind it,” he said.

“Expect really interesting things in the next several months.”

(Companies in this story: TSX:QSR)

Tara Deschamps, The Canadian Press

by Canadian Press

Tim Hortons president vows to improve relationship with franchisees after unrest

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